Bitcoinand other major cryptocurrencies slumped on Tuesday as investor optimism over a proposed US Crypto Strategic Reserve faded. The decline also came amid escalating trade tensions, with US President Donald Trump confirmingtariffson Canada, Mexico, and China would take effect within hours.

Investors turned risk-averse after Trump announced that 25% tariffs on Canada and Mexico, along with a doubling of China levies to 20%, would be implemented from 05:01 GMT on Tuesday. Market concerns were further fueled by signs of economic strain, with U.S. factory gate prices hitting a nearly three-year high and supply chain disruptions intensifying.

Vikram Subburaj, CEO of Giottus, noted, “Bitcoin has surrendered its weekend gains and is trading within a tight range of $82,000 to $85,000 as investors assess the impact of upcoming U.S. tariffs. Marketvolatilityis expected to persist, particularly as these tariffs take effect later today.”

As of 10:45 AM IST, Bitcoin was down 9.8% at $83,725, whileEthereumplunged 15% to $2,083. The global crypto market cap dropped 10.5% to $2.76 trillion in the past 24 hours. Altcoins also saw steep declines, with Cardano plunging 25%, Solana dropping 19%, Dogecoin falling 16%, and XRP losing 18%.Alankar Saxena, CTO and co-founder of Mudrex, warned, “Investors should remain cautious as volatility might continue if BTC breaks the support at $81,000. On the upside, BTC’s resistance remains at $92,000, showing ample scope for recovery once market sentiment shifts.”

Also Read: Bitcoin falters as optimism wanes on Trump’s crypto reserve plan

On Monday, Trump fueled crypto enthusiasm by announcing on social media that Bitcoin, Ethereum, XRP, Solana, and Cardano would be included in a proposed U.S. Crypto Strategic Reserve, with Bitcoin and Ether at its core.

Also Read: Bitcoin is a bubble and will blow up someday, says Jim Rogers

Following the announcement, Bitcoin briefly surged 10% to $92,905, while Ether jumped 13% over the weekend to settle at $2,443. Cardano led gains with a 64% rally to $1.07, followed by XRP’s 25% rise to $2.79 and Solana’s 18% increase. However, the rally was short-lived as skepticism over implementation and regulatory hurdles led to a sharp reversal.

“The crypto market experienced extreme volatility following Trump’s announcement. Initial gains faded quickly due to doubts about execution and regulatory approvals. The added uncertainty from Trump’s tariff measures triggered a broader market sell-off,” said Avinash Shekhar, co-founder and CEO of Pi42.

Also Read: Pi Coin’s next move: Can it hit $100 and beyond?

Bitcoin’s market capitalization fell to $1.66 trillion, with its dominance at 60.22%. Its 24-hour trading volume spiked 14.8% to $75.6 billion. Stablecoins accounted for 93.21% of total crypto trading volume, reaching $172.97 billion, according to CoinMarketCap.

(Disclaimer: Recommendations, views, and opinions expressed by experts are their own and do not reflect the views of The Economic Times)